British American Tobacco to Cut 9,000 Jobs in Major AI Shift

British American Tobacco (BAT), one of the world’s largest tobacco companies, has announced a major plan to cut 9,000 jobs. This number represents nearly one-fifth of its total global workforce of 47,000 people. According to BBC Business, the company will remove 5,500 roles entirely and move 3,500 other jobs to outside companies. This process, known as outsourcing, means that other businesses will handle specific tasks for BAT. The company says these changes are already happening and should be finished by the end of this year.

The tobacco giant, which produces well-known brands like Lucky Strike and Dunhill, is making these changes to lower its costs. The company expects this plan to save about £600 million every year by 2028. According to The Guardian, the chief executive of BAT, Tadeu Marroco, stated that the company is building a future-ready organization. He explained that the goal is to make the business more agile—meaning it can change and react quickly—and more focused on technology. The company has been working with a technology consultancy called Accenture to gain access to advanced AI solutions, which are computer systems that can perform tasks usually requiring human intelligence.

This decision comes as the tobacco industry faces a difficult time. Fewer people are buying traditional cigarettes, and the company is trying to shift its focus toward "next-generation products." These include items like Vuse vapes and Velo nicotine pouches. While sales of these new products are growing, the transition has been slow. Dan Coatsworth, an expert from AJ Bell, noted that the industry is struggling with challenging market conditions. One major problem is the rise of illegal products, which are sold without proper permission and take away market share from legal companies.

In addition to changing consumer habits, BAT is dealing with other pressures. The company has faced rising taxes and stricter government rules in many countries. In the United States, which is the company's biggest market, regulators have been very careful about approving new products. This has delayed the launch of new items and allowed illegal, non-approved products from other countries to enter the market. However, The Guardian reported that there will be no job cuts in the United States, where the company operates through its subsidiary, Reynolds American.

Financial experts have been watching these developments closely. The company has also been closing some of its traditional cigarette factories, including a major site in South Africa, because of competition from illegal trade. Despite these challenges, BAT remains optimistic about its future. The company recently told investors that its revenue from smoke-free products is growing quickly. While the company’s share price fell slightly after the announcement, it has seen overall growth throughout the year.

For the employees affected by these changes, the company has promised support. Chief executive Tadeu Marroco said that the business is focused on helping its colleagues through this transition with care and respect. As the company moves forward, it hopes that becoming more digital and AI-focused will help it stay competitive in a changing world. The move highlights how even the oldest and largest companies are now turning to technology to survive in a market where traditional habits are quickly disappearing.